Will Hyundai or Kia EVs Qualify for the Electric Vehicle Tax Credit Kiplinger Kiplinger is supported by its audience. When you purchase through links on our site, we may earn an affiliate commission. Here's why you can trust us.

Will Hyundai or Kia EVs Qualify for the Electric Vehicle Tax Credit

The new electric vehicle tax credit has spurred concern that Kia and Hyundai EVs won't qualify-without some flexibility. (opens in new tab) (opens in new tab) (opens in new tab) Newsletter sign up Newsletter (Image credit: Getty Images) By Kelley R. Taylor published 6 October 2022 Ever since President Biden signed the Inflation Reduction Act, which unveiled a revamped electric vehicle tax credit, some major industry manufacturers have expressed concern over new sourcing and assembly requirements in the massive climate, energy, healthcare, and tax law. To spur domestic EV production," the Inflation Reduction Act requires that final assembly of so called "clean vehicles" occur in North America, for those EVs to qualify for the EV tax credit. The final assembly requirement became effective August 16, 2022. There is a similar requirement in the Inflation Reduction Act, that minerals and other key components (i.e., battery components), which are used to manufacture electric vehicles, also be primarily sourced in North America-by 2026. South Korea has been vocal in its belief that the new EV tax credit requirements mean that many EVs, including those made by Hyundai and Kia, won't qualify for the electric vehicle tax credit. To address those concerns, South Korean President, Yoon Suk-yeol, recently met with President Biden to discuss the impact of the new EV manufacturing and sourcing requirements.

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Profit and prosper with the best of Kiplinger's expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail. Profit and prosper with the best of Kiplinger's expert advice - straight to your e-mail. Sign up Vice President Kamala Harris also met with South Korea's prime minister, Han Duck-soo, in September. Both sides have since expressed a desire to work together throughout the implementation of the Inflation Reduction Acts' electric vehicle tax credit provisions.

The Affordable Electric Vehicles for America Act

Meanwhile, U.S. Sen. Reverend Raphael Warnock (D-Ga.), who is in a closely watched 2022 midterm elections race against former NFL running back, Herschel Walker, has encouraged the Biden administration to consider flexibility in the implementation of EV tax credit reforms. Additionally, the Georgia senator recently proposed the Affordable Electric Vehicles for America Act, which would create a phase-in-period for the Inflation Reduction Act's electric vehicle sourcing and manufacturing requirements.

EV Tax Credits Are Changing: What's Ahead Essentially, if passed, the battery sourcing requirement wouldn't go into effect until 2025, and the final assembly requirement would be delayed until 2026. The idea is that if automakers have more time to meet the new EV requirements, more buyers who purchase electric vehicles, will qualify for the $7,500 EV tax credit. Why did Sen. Warnock introduce the Affordable Electric Vehicles for America Act? Well, the stakes in Georgia are high, in part because of the 2022 midterm elections which could determine the balance of power in the U.S. Senate. But also: Hyundai is set to begin construction next year on an EV auto manufacturing plant in Georgia. The multi-billion-dollar investment, which was announced in May, is significant and could be directly impacted by the new electric vehicle tax credit requirements in the Inflation Reduction Act. In proposing the Affordable Electric Vehicles for America Act, Warnock said that in addition to needing more time to meet onshoring requirements, Georgia automakers need more time to bring planned domestic EV facilities online. The Hyundai facility is scheduled to open in 2025 in Bryan County, GA.

Vehicles That Qualify for the Electric Vehicle Tax Credit

At this time, since Congress is out of session, it's hard to say whether Warnock's bill will gain any traction. If the proposed legislation falls flat, the Inflation Reduction Act's requirements for sourcing and manufacturing electric vehicles in North America will be implemented in accordance with the law as enacted. As a result, major EV industry automakers whose electric vehicles aren't currently primarily sourced in North America, will likely work to shift manufacturing to the U.S., so that their vehicles might qualify for the new EV tax credit.

The Inflation Reduction Act and Taxes: What You Should Know So, what can you do? Well, if you're in the market for popular Kia Niro, Kia EV6, or Hyundai IONIQ5 electric vehicles for example, you will likely have to wait and see if anything changes with the sourcing and manufacturing of Kia or Hyundai EVs. In the meantime, keep an eye on the Department of Energy's current listing of which vehicles are eligible for the new EV tax credit. And, for more detailed information about the new EV tax credit and the Inflation Reduction Act, see EV Tax Credits Are Changing: What's Ahead.

The Federal Tax Credit for EV Chargers is Back Explore More Tax Tips Tax Breaks Kelley R. TaylorTax Editor, Kiplinger.comWith more than 20 years experience as an in-house legal counsel and business journalist, Kelley R. Taylor has contributed to numerous national print and digital magazines on key issues spanning education, law, health, finance, and tax. Kelley particularly enjoys translating complex information in ways that help empower people in their daily lives and work. Latest 15 States That Tax Military Retirement Pay (and Other States That Don't) retirement Taxes on military retirement pay vary from state-to-state. How generous is your state when it comes to helping retired veterans at tax time? By Sandra Block • Published 10 November 22 Finding Peace of Mind With Your Retirement Income Even in tough times, you can secure retirement income that lets you maintain your lifestyle, lasts a lifetime, adjusts for life events and leaves a legacy for the kids. By Jerry Golden, Investment Adviser Representative • Published 10 November 22 You might also like 15 States That Tax Military Retirement Pay (and Other States That Don't) retirement Taxes on military retirement pay vary from state-to-state. How generous is your state when it comes to helping retired veterans at tax time? By Sandra Block • Published 10 November 22 $2.04 Billion Powerball Lottery Jackpot Winner Will Have a Massive Tax Bill The $2.04 billion-dollar Powerball jackpot has its big winner and the federal government will get a big chunk of the prize from taxes. By Kelley R. Taylor • Last updated 9 November 22 New "Stimulus" Check 2022: Massachusetts Tax Refund Money is Being Sent Now Massachusetts will return nearly $3 billion to eligible taxpayers beginning in November. By Kelley R. Taylor • Last updated 9 November 22 What's the Standard Deduction for 2022 vs. 2023? Tax Breaks Most Americans claim the standard deduction on their federal tax return instead of itemized deductions. How much can you claim on your 2022 and 2023 returns? By Rocky Mengle • Last updated 9 November 22 What Are the Capital Gains Tax Rates for 2022 vs. 2023? capital gains tax The capital gains tax rate that applies to a capital gain depends on the type of asset, your taxable income, and how long you held the property sold. By Rocky Mengle • Published 3 November 22 Virginia 2022 "Stimulus" Tax Rebates Many eligible Virginians have received an up to $500 tax rebate check for 2022. By Kelley R. Taylor • Last updated 2 November 22 What Are the Income Tax Brackets for 2022 vs. 2023? tax brackets Depending on your taxable income, you can end up in one of seven different federal income tax brackets – each with its own marginal tax rate. By Rocky Mengle • Last updated 9 November 22 California Stimulus Checks: More Debit Cards Going Out This Week If your last name begins with F to M, a California stimulus payment debit card could be in your mailbox soon. By Rocky Mengle • Last updated 7 November 22 View More ▸ kiplinger About Us (opens in new tab) Terms and Conditions (opens in new tab) Privacy Policy (opens in new tab) Cookie Policy (opens in new tab) Kiplinger is part of Future plc, an international media group and leading digital publisher. Visit our corporate site.
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